TOKYO (Reuters) -Japan’s factory output jumped in June and job availability rose to the highest level in nearly a year, data showed, a sign robust overseas demand was offsetting the drag to consumption from the coronavirus pandemic. But retail sales were largely flat in June from a year earlier, suggesting any recovery in the world’s third-largest economy would be slower than other advanced nations. The mixed batch of data comes as Tokyo hosts the Olympic Games amid a rise in coronavirus infections that forced the capital impose state of emergency curbs. The renewed restrictions have dashed policymakers’ hopes of a strong rebound in July-September growth after an expected weak economic performance in the previous quarter. Industrial output increased 6.2% in June from the previous month after a sharp 6.5% drop in May, data showed on Friday, marking the highest growth since July last year and exceeding a median market forecast for a 5.0% gain. The main driver was carmakers, which ramped up production by 22.6% as they saw the impact of a global chip shortage ease somewhat, a government official told a briefing. Manufacturers surveyed by the government expect output to fall 1.1% in July but rise 1.7% in August, a sign robust global demand for machinery and cars will underpin Japan’s recovery. “We are continuing to see the impact of the global chip shortage but it’s moderating somewhat, mainly for automakers,” the government official said. “But manufacturers’ August output plan may not fully reflect the impact of the spread of new COVID-19 variants on global and domestic economies, as well as the risk of a prolonged chip shortage,” he said. Japan’s job market remains tight. An index gauging job availability rose to 1.13 from 1.09 in May, exceeding market estimates for a 1.10 reading and marking the highest level since May last year. The jobless rate fell to 2.9% from 3.0% in May. Underscoring the fragile state of consumption, however, retail sales were up just 0.1% in June from a year earlier, compared with a median market forecast for a 0.2% gain. As COVID-19 cases spike to records across Japan, the government proposed expanding state of emergency curbs to more parts of the country through Aug. 31. Japan’s economy shrank an annualised 3.9% in January-March and likely barely grew in the second quarter, as the pandemic took a toll on service spending. Reporting by Kaori Kaneko and Leika Kihara; Additional reporting by Kentaro Sugiyama and Takaya Yamaguchi; Editing by Sam Holmes Our Standards: The Thomson Reuters Trust Principles.